\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Performance overview
22q1, the net profit attributable to the parent company was 5.437 billion, a year-on-year decrease of 36.4%; The revenue was 146554 billion, a year-on-year decrease of 3.1%; ROE2. 4%, a year-on-year decrease of 1.5pt; Net assets were 221507 billion, down 2.3% from the end of last year.
Core concerns
1. Life insurance: personal insurance continued to be under pressure and bancassurance broke out.
22q1, the new single premium was 28.4 billion, a year-on-year increase of 22.1%. The increase of new insurance is mainly due to the explosive growth of Bancassurance channel. Bancassurance’s new orders are 11.03 billion, exceeding that of individual insurance new insurance (9.22 billion), an increase of 11 times year-on-year. It is expected that the company will realize the premium explosion mainly through orderly layout of strategic areas and focusing on strategic channels. However, considering the low value rate of this channel, it is expected to make a limited contribution to the overall new business value of the company. The pressure of individual insurance is still high, with a year-on-year decrease of 44.1%. However, the quality of the team and business quality are improved, and the retention of newcomers is higher. The continuation rate of insurance policies in March increased by 5.3pt to 89% year-on-year. On the whole, due to the large decline in new orders of personal insurance channels that contribute the main value and the sales of more savings products, the value rate has declined, and the overall new business value is expected to decline by 40% ~ 50%.
Looking forward to the future: CPIC continues to deepen the phase I project of “long voyage action” and build a multi-channel pattern of individual insurance, bancassurance and group insurance. The quality of individual insurance team is better, the business rhythm is more balanced, and the reform effect is expected to be gradually reflected.
2. Insurance premium: increase the cost and optimize the property insurance rate.
22q1, the premium was 49.86 billion, a year-on-year increase of 14%. The premium of auto insurance was 24.44 billion, an increase of 11.8% year-on-year. The non auto insurance maintained a rapid growth, with a premium of 25.43 billion, an increase of 16.2% year-on-year. The comprehensive cost rate is 99.1%, which is slightly optimized by 0.2pt year-on-year. Mainly due to the decline of the cost rate, it is expected that the company will reduce the cost rate by 2pt to 28.7% by continuously improving the fine management ability.
Looking ahead, the short-term epidemic will affect the auto market and is expected to affect the auto insurance business. However, throughout the year, the steady growth trend of property insurance will not change, and the cost rate is flat.
3. Investment: the stock market fell and the investment income decreased significantly.
22q1, the company’s investment income was 17.9 billion, with a year-on-year decrease of 34.6%. The net investment return and total investment return were 3.7%, with a year-on-year decrease of 0.2pt and 0.9pt respectively. In the first quarter of this year, the equity market fell significantly, and the long-term interest rate fluctuated around 2.8%, which significantly affected the company’s investment income.
4. Solvency: the core adequacy ratio decreased significantly.
22q1, according to the second generation and phase II regulatory system, the core solvency adequacy ratio decreased significantly, with CPIC life insurance 147%, a decrease of 71pt compared with the end of the previous quarter, property insurance 185%, and a month on month decrease of 54pt. However, from the absolute value, it is still much higher than the regulatory requirement of 50%, and the adequacy ratio is high.
Profit forecast and valuation
China Pacific Insurance (Group) Co.Ltd(601601) “long voyage action” has been promoted in an orderly manner, the company seeks progress while maintaining stability, and is optimistic about the gradual emergence of reform results. It is estimated that the year-on-year growth rate of China Pacific Insurance (Group) Co.Ltd(601601) net profit attributable to parent company from 2022 to 2024 will be – 5.3% / 15.1% / 36.4%. The current price corresponds to 0.36/0.33/0.29 times PEV from 2022 to 2024. Maintain the target price of 35.2 yuan, corresponding to pev0.5 yuan of 2022e group 63 times, maintaining the “buy” rating.
Risk tips
The epidemic has spread repeatedly, the economic environment has deteriorated, the reform has been promoted slowly, and the real estate risk has expanded.
